Question

In case of essential goods, the elasticity of demand is ____________.

• A. Zero
• B. Low
• C. High
• D. Infinity

Answer 1

The correct option is B Low

$\Rightarrow$ Goods that are considered essential have a low elasticity of demand.

$\Rightarrow$ There will always be a need for consumer staples and a change in price is unlikely to impact demand.

$\Rightarrow$ Electricity, gas, oil, and water are all relatively inelastic because consumers rely on these as necessities rather than luxuries. Also, keep in mind that the price elasticity of demand is very time-sensitive.

$\therefore$ In case of essential goods, the elasticity of demand is Low.